Mexico’s Power Sector Pivots Toward Solar Energy

Mexico is accelerating its push into solar energy, with installed photovoltaic capacity projected to more than triple to 37.8GW by 2035, while wind power also expands and natural gas remains the backbone of system reliability, according to GlobalData and Ember. GlobalData estimates solar capacity will grow at a compound annual growth rate of about 10.7% between 2024 and 2035, supported by Mexico’s strong solar resource base, continued utility-scale project development and rapid growth in distributed generation.

The findings are detailed in GlobalData’s report, Mexico Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035. The report notes that national planning frameworks prioritize long-term capacity additions to meet rising electricity demand from industry, manufacturing and expanding urban centers.

Moreover, an analysis by energy experts at Ember indicates that the country’s climatic conditions could allow solar energy to supply close to 90% of national electricity demand. According to the report, solar accounted for only 6.6% of Mexico’s electricity generation in 2023. By 2030, however, this source would be key to reaching a 45% share of clean electricity, representing about one-fifth of total power generation. Reaching that target would require accelerating solar deployment to about 36GW plus 30GWh of battery storage by 2030. 

Key recommendations include closing the cost gap through competitive procurement processes, streamlined permitting, expanded transmission infrastructure, attractive financing conditions and stronger domestic supply chains. “With the right investment and political support, Mexico can close the gap with global installation costs to unlock its full solar potential and strengthen its energy independence,” said Wilmar Suárez, Analyst, Ember. Currently, solar development costs in Mexico are up to 40% higher than in Chile or Brazil, the region’s most advanced solar markets.

Global Data also noted that wind power is expected to contribute significantly to clean energy growth. Onshore wind capacity is projected to increase from about 7.8GW in 2024 to roughly 16.5GW by 2035, driven by continued development in high-resource regions such as Oaxaca and Tamaulipas. These projects are supported by mixed investment models involving CFE and private developers. Together, solar and wind are expected to account for most new clean capacity additions, reshaping Mexico’s generation mix through 2035.

“The expansion of clean energy in Mexico is being shaped by long-term planning under the National Electricity Sector Strategy 2024–2030 and PLADESE 2025–2039, along with the March 2025 reform to the Electricity Industry Law. These measures strengthen system planning to integrate higher levels of variable generation and reinforce investment incentives through stricter eligibility criteria within the Clean Energy Certificates framework, favoring new clean energy capacity,” said Mohammed Ziauddin, Energy Analyst, GlobalData.

Ember highlighted that improving the energy mix with solar power could reduce Mexico’s dependence on gas imports from the United States for power generation by about 20%. Suárez warned that relying on a single supplier for gas imports is very risky, citing unexpected supply cuts due to environmental or market factors, as well as price volatility that can affect the broader economy.

Nonetheless, Global Data underscores that this transition could take some time, as natural gas will continue to play a central role in Mexico’s power system in the near future. In fact, installed gas capacity is projected to increase from 52.7GW in 2024 to 64GW by 2035.

Ongoing investment in combined-cycle plants, pipeline infrastructure, liquefied natural gas terminals and storage facilities reflects the government’s strategy to maintain system reliability and affordability as solar and wind capacity expand. Gas is expected to remain the primary backup fuel through 2035, supported by Mexico’s close integration with regional gas markets, Global Data explained. 

“Mexico’s power sector is developing along a dual-track trajectory, with solar emerging as the dominant source of new clean capacity while gas-based generation continues to support system reliability. This approach supports energy security and positions the country for sustained low-carbon electricity growth through 2035,” Ziauddin said.